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New Experimental Tax And Levy Payment Regime – Tax Authorities



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On 1 July 2022, an experiment was launched in Russia to
introduce a new procedure for paying and crediting taxes to the
budget through the unified tax payment (UTP) mechanism. Currently,
participating in the experiment is voluntary, but if the experiment
is successful, at least a number of taxpayer categories are highly
likely to be switched to making the UTP on a mandatory basis from 1
January 2023. As early as at the end of 2021, Federal Law No.
379-FZ dated 29 November 2021 was adopted. It introduced article
45.2 into the Tax Code, which established the rules for applying
this regime.

The UTP is a specific advance procedure for transfer of taxes,
fees, levies (except for the state duty) and penalties using one
payment document. Amounts received under such a payment document
will be credited to a specific account with the Federal Treasury.
The tax inspectorate will allocate money by payment type. For this
purpose, companies should submit a notice to the Federal Tax
Service Inspectorate at least five business days prior to the date
of the relevant payment. The form of such a notice is established
by Appendix No. 1 to Order of the Federal Tax Service (No.
ED-7-8/178 dated 2 March 2022). The notice should be submitted in
electronic form and one document may specify several payments for
different taxes and different tax periods.

The law establishes certain priority for debiting funds from
companies. Tax arrears will be debited first. If there are several
tax arrears for different taxes and different periods, the earliest
ones by the date of origin will be debited first. Taxes and levies
are then debited in the order of precedence as the liabilities
arise, based on the statutory payment dates. After that, penalties,
interest and fines imposed on the company will be debited. The
company may return the balance unused to pay taxes and make other
payments from the account designated for the UTP at any time.

The new procedure involves both certain conveniences and
disadvantages for businesses. The positive aspects include the fact
that the risk of tax non-payment due to erroneously indicating any
details in a payment order (eg, code per any classifier and payment
type) is eliminated. According to the current rules, in such a
case, the payment is delayed until it is clarified, and the tax is
considered to be unpaid, which results in accruing penalties or, if
such a situation is protracted for a long time, it may lead to
blocking the company’s accounts or using other methods of
enforcement of tax liabilities. All these risks are eliminated by
using the UTP mechanism. In addition, the new procedure will
exclude the now-possible situation where the company overpays one
tax bill and has arrears in another one. The UTP can be
particularly convenient for the entities participating in various
public tenders, auctions and projects — wherever it is
necessary to provide a tax clearance certificate as part of
documents.

However, the UTP has a number of negative aspects. First, it is
actually advance payment of taxes, which means earlier withdrawal
of funds from the taxpayer’s turnover. However, the law does
not establish time frames for depositing funds for the UTP –
it can be replenished each time before the next payment as
well.

Second, if an error occurs during the UTP administration (which
tends to be the case with the Federal Tax Service’s electronic
services) and some other payment is automatically debited, the
company will have arrears caused by the third party’s
actions.

Another possible disadvantage for companies is automatic
repayment of any arrears from the UTP account, even the one that
the company:

  • does not recognise;

  • has intended to pay; or

  • has intended to challenge in court.

In general, it can be concluded that the UTP mechanism is more
convenient for small and medium-sized businesses, as it reduces
expenses on tax administration and decreases the error probability
when paying taxes.

Originally published by ILO Newsletter

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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